The Slovenia Times

Govt called to assess impact of coalition agreement measures


The opposition-controlled commission discussed the topic on Wednesday on proposal from the Democrats (SDS), whose MP Andrej Šircelj said that implementation of policies planned in such a fashion would be a "disaster".

The expenditure planned in the coalition agreement violates the golden fiscal rule, he said, adding that "this is unacceptable for the economy and the entire country".

Šircelj presented the calculations by the Fiscal Council, which say that, if the measures from the coalition agreement were implemented, budget expenditure would exceed revenue by EUR 400m next year, by EUR 800m in 2020, by EUR 1.2bn in 2021 and by EUR 1.6bn in 2022.

Davorin Kračun, the head the fiscal watchdog, noted that these were only estimates, adding that the "coalition agreement is unclear in many segments, which is why it is hard to precisely assess the effect on public finances."

Kračun confirmed that the framework of the coalition agreement suggested a noticeable increase in general government spending, while adding that the document was much less convincing when it came to revenue that would support such expenditure.

Finance Minister Andrej Bertoncelj tried to dispel the concerns about the government not intending to respect the balanced budget rule. "I don't intend to put myself above the law," he said.

The session was also attended by representatives of businesses, who are worried by the planned changes in taxation which made many entrepreneurs consider moving their businesses to more predictable and stable business environments.

Bertoncelj said that "no sudden reforms that would destabilise our system are envisaged. There will be no overnight measures." He added that first changes in taxation could be introduced only at the beginning of 2020 or even in 2021.

The minister thinks that the current 19% rate for corporate income tax is favourable and need not be changed.

Regarding taxation of capital gains, which the coalition agreement proposes to be included in the personal income tax base, Bertoncelj said that he preferred the current, schedular system.

"I therefore think that we don't need a tax reform, but restructuring in the area where some criteria are weak," he said, calling for higher tax revenue, but not necessarily only by means of higher tax rates.

In line with today's decisions, the government has 30 days to calculate the financial impact of all measures in the coalition agreement and respond to the comments from the Fiscal Council.


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